Google's data-crunching ways found that the majority of Gmail users aren't actually using the webmail service's labels. Starting today, those label names get higher placement, and drag-and-drop labeling aims to make Gmail's labels more like familiar email folders.
By placing users' own labels higher up on the left-hand sidebar, right below the main Inbox/Starred/Sent/Drafts/All Mail destinations, Gmail admits that keeping them in their own box, stuck underneath the chat widget, implied they weren't that important before. Fixes like those contained in Gina's Better Gmail 2 Firefox extension and the "Go to label" keyboard shorcut in Gmail's Labs section helped, but now labels are easier to reach, and kept more at the front of your email-clearing mind.
The three labels you use most are automatically shown below your main links, with the rest accessible from an "X more" drop-down. You can add more labels to your shown list, however, by clicking the downward-facing arrow next to a label and choosing "Show label."
Those higher-up labels are also a boon to frequent
I've wanted this for years. Most of my mail goes straight into folders (okay, 'labels') so having to scroll down half the screen all the time is a pain.
Having all those 'draft', 'archive' etc folders was just wasted screen space and now I can put them away where they belong and own my own set of folders where I want them, just as I would with a real email program.